Kyndryl, which split off from IBM in November 2021, is exclusively focused on providing IT services. The company said it is benefiting from enterprises' desire to implement AI-powered applications and services, as many lack the expertise to do it alone. This was the main reason why its consulting revenue increased 23% in the quarter. The company has high hopes for generative AI and has set itself a target of generating $1 billion in revenue from so-called “hyperscalers” during fiscal 2025. It appears to be on track to hitting that goal, recognizing $260 million in revenue tied to customers using cloud infrastructure services.
Key takeaways:
- Kyndryl Holdings Inc., formerly a part of IBM Corp., reported a second-quarter loss of 19 cents per share, which was better than the 24-cent-per-share loss expected by analysts.
- The company's revenue dropped by 7% from a year earlier, but at $3.77 billion, it was still higher than the Wall Street analysts’ consensus estimate of $3.72 billion.
- Kyndryl's consulting revenue increased 23% in the quarter, mainly due to enterprises' desire to implement AI-powered applications and services.
- The company reaffirmed its fiscal 2025 revenue forecast of between $15.2 billion and $15.5 billion, the midpoint of which is above the Street’s target of $15.27 billion.